What’s the news?
Axis Mutual fund changes fund manager in seven schemes amid front running allegations.
What does that mean?
Axis MF is the seventh-largest mutual fund in the country, with Rs 2.59 lakh crore of assets under management. But, in a surprise move, Axis mutual fund has changed fund managers in seven of its funds. The change in fund manager has come when certain allegations have hit the fund house.
Among those removed as fund managers are Chief Trader & Fund Manager Viresh Joshi and Assistant Fund Manager Deepak Agrawal. The two fund managers have been sent on indefinite leave.
Viresh Joshi, the chief trader and fund manager, will no longer be part of any Axis Mutual Fund scheme. He was the fund manager of five schemes – Axis Arbitrage Fund, Axis Banking ETF, Axis Nifty ETF, Axis Technology ETF and Axis Consumption ETF.
Deepak Agarwal, an equity research analyst and assistant fund manager of Axis Consumption ETF, Axis Quant Fund and Axis Value Fund, is no longer part of these schemes.
There are, as of yet, unconfirmed reports in the market on allegations of front running. However, market regulator Securities and Exchange Board of India (SEBI) has initiated a probe into the matter.
What is Front Running?
Front running is when someone trades on shares based on exclusive information passed on by another party. The party is privy to specific details about large deals related to the stock that might affect its price significantly. This is an illegal practice in India and most other countries and attracts stiff penalties.
There has been no official statement from the fund house or the regulator till now on the matter.
The list of funds and respective fund manager changes have been mentioned below.
How does that impact your wealth?
The allegations are serious and can impact the specific funds that were managed by the fund managers now removed. However, it would be difficult to say about the nature of the impact until further information becomes available.
The aforementioned mutual funds have not been part of any recommendation at Scripbox. However, the situation is developing, and we firmly believe that one can act only with concrete information.
We will keep you posted on any further developments. As we monitor the unfolding situation, you can be assured that we will also suggest the next steps for investors if and when we believe they are necessary or prudent.